I wonder how many guys enthusiastically signed off on George Lucas taking a pay cut in exchange for, what, keychains and some lunchboxes? C’mon, how much Star Wars merchandise can ensue?
Those are great stories, and I absolutely believe them.
Back in the ancient days after advertising suddenly became cool during the Mad Men era, loads of advertising writers got the idea of writing books. I think Jerry Della Famina started the trend with the marvelous From Those Wonderful Folks Who Gave You Pearl Harbor: Front-line Dispatches from the Advertising War. (Yes, I know you couldn’t use that title today. It was mocking the thinking that clients used, in the same way that the more recent Toxic Sludge is Good For You: Lies, Damn Lies and the Public Relations Industry does.)
Those stories don’t get told much these days. Maybe a few self-published memoirs, but not easy-to-find bestsellers.
I was around in 1977. Nobody knew. NOBODY knew.
That could be this guy.
The problem as I see it with Saturn was their lack of distinctive styling. They were cruising the roads for nearly a year before I noticed one for the first time. They were very generic looking for the time and the badging was really hard to notice. If a giant car manufacturer cooks up a new brand, people expect the vehicles to LOOK new and distinctive! Saturns just blended in with the traffic.
Always a good time for some Negativland.
Colt sometime in the 00’s decided to cut costs by not doing as stringent Quality Control on it’s rifles, which lead to a steady decline in the reliability of their rifles despite the fact Colt had 100% of the military government contracts for it’s M16 and M4 rifle series that were being bought up by the truck-load by the US military for the wars in the Middle East (as well as given to foreign allies). This lead to Colt Rifles CONSISTENTLY failing trials compared to competitor rifles and coming in last place in most of them. In the biggest business slap in the face ever, in 2013 the US Government decided to cancel their primary source of business, their contracts to build M16’s and M4’s for the Army, by giving the contract to another company (FN in Belgium) and having a foreign company build new M16’s and M4’s, despite the fact Colt had been the manufacturer of the M16 since they invented the gun in the 60’s. This lead to them declaring bankruptcy less than 2 years later, and while they still exist today they were bought out by a foreign company in 2021.
There was a (maybe apocryphal) story that made the rounds years ago that said that the day after the iPhone came out, RIM executives had a meeting to talk about the iPhone demo and concluded that Apple effectively had to be lying to everyone because there was no way the iPhone could do all the things the demo showed and yet still have anywhere near usable battery life.
The Palm people weren’t much better (and failed just has hard):
“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”
—Palm CEO Ed Colligan, November 16, 2006
Nokia had 51% of the mobile phone market in 2007.
It’s core expertise was hardware engineering.
But its software…not so good. It was trapped by an mobile operating system that could not accommodate the changes demanded by over 57 different models of phone. Apple and Google had the software engineering skills and developed operating systems that could run apps.
Nokia left it too late and decided in desperation that Microsoft would save it with their Window Phone operating system. They were wrong. They switched to Android, but by then it was too late.
The company still exists and its telecommunications products outside the smartphone sector are well regarded.
One thing I remember from those times is that there was a fundamental shift in the smart phone business. Handset manufacturers regarded their customers as the big telecommunication companies. Big telecos owned the relationship with the end users and the customers they were interested in were profitable business customers.
Apple saw things differently and pursued a direct relationship with the end users and they recognised the potential growth amongst non-business customers from their experience with iPod MP3 players. They had learned how to create a user interface and kept the number of a models low in order develop stable software. Carefully vetting written by third parties that made the phones more useful.
Google were not far behind, creating Android, an operating system that could be sold to handset manufacturers. Both these business models have been successful.
Nokia was also limited by an internal culture that encouraged pleasing the bosses. Top down, command and control. They latterly tried to switch to matrix management and this led to internal feuding.
Nokia had the mobile phone market in the palm of its hand and lost it spectacularly because of bad management. They failed to understand that the market was changing and who their customers should be. They failed to understand that software and a user interface was the key to producing a product that was easy to use. Then they tried to cut a clever deal with Microsoft, which turned out to be a trojan horse. It is was not the first time Microsoft had pretended they had developed an operating system for a large customer (IBM) that was rather set in its ways.
We can draw some comparisons with the auto industry, which has no shortage of short sighted management that cannot or will not read the writing on the wall.
General Motors developed an electric car, the EV-1, in 1997 as a result of pressure from regulators concerned about pollution.
If they had continued to develop this technology, they would have had a technological lead that would have prepared them to dominate the emerging EV market.
Instead, they decided to engage in ‘regulatory capture’ tactics to get the irksome regulations changed. Then they tried to scrap every EV car they built. They wanted to kill the technology to protect their existing investment in internal combustion engine cars.
They still seem to have politicians in their pocket.
I wonder how much business GM has lost to upstarts like Tesla and whether they can recover the technical lead.
Their software better be good.
I saw a program hosted by James May (or one of the other Top Gear hosts) that talked about auto history. It mentioned that after World War II, when the Allies found the bombed plant and the plans for the Type 1 (i.e., the Beetle). They offered the plant and the car design to existing car companies (American, Australian, British, and French, according to Wikipedia) and all rejected the offer. The Beetle ended up being one of the top-selling models of all time and today Volkswagen is one of the biggest car companies in the world.
Here’s a local one:
A new restaurant opened near me a few months ago. They serve Brazilian style fast food, or really more of a Brazilian-American fusion, and the food is pretty good. But I fear they won’t last, for a couple of reasons.
As far as I can tell, the chef (and I assume owner) is the only person working there. Every time I’ve gone in there there’s been no one at the counter. I had to stand around until the chef noticed I was there and came out of the kitchen to take my order. Besides the fact that’s he’s making his customers wait, him splitting his time between taking orders and cooking is going to limit how many customers he’s able to serve.
Also, they don’t seem to be advertising. At least I haven’t seen any advertising from them. The only reason I noticed they were there was because I happened to be looking at the area on Google Maps and noticed the little marker for the restaurant. And their location isn’t that great, an older shopping center that doesn’t have any big anchors. So I doubt they get a lot of foot traffic, and you wouldn’t really notice them if you were driving by on the arterial street, so they need some way of driving people to the restaurant.
If we’re doing phones, then MS’s attempt at the phone market has to be cited. $7+ billion dollars ended up being wasted on it. Never got to 4% market share.
For the most part it was a pretty good product, people liked it, etc. But one big issue they had was that was that app developers weren’t making versions for their phone for MS’s app store. (And Windows users, unlike Apple users like to be able to have choices on software sources.) The Windows Phone app store was tiny compared to the Apple and Google ones.
So they made The Best Decision Ever. They announced they were working on a system to allow developers to easily port Android apps to their phone. So the developers stopped working on Windows Phone versions … and MS never got around to actually releasing the porting system.
And that … is the end of the story.
Well, except for what happened to Nokia.
Yes, bad decision, but that wasn’t it. The idea of Saturn was to develop a car outside the influence of the suits in Detroit. I had a '93 Saturn, and it was a great car, and it saved my wife’s life when someone T-boned it when she was driving it. But as soon as Saturn became a bit successful the honchos in Detroit took it over, made the styling look like all their other cars, and basically ruined it. I bought a new one to to replace the old one in 1997 after it got totaled, and the experience and the car was a lot different.
Saturn was covered in In Search of Excellence. Oddly, many of the companies featured there crashed and burned soon after.
Short sighted focus on what “their business” was. They were in the photography business, not the film/processing business, but that’s not how they saw it.
Of course in the long term, they were screwed regardless, since pretty much all purpose-built cameras of all kinds have essentially evaporated from the market in favor of increasingly capable phone cameras.
Absolutely. This one has long baffled me.
I’m not a business historian, but it seems to me that the bigger threat isn’t shifting the core business, it’s doggedly NOT shifting in the face of trends that say they should. Companies like Kodak, Blockbuster, Sears, etc… all stuck with their core businesses instead of shifting, and suffered as a result.
What annoys me about Microsoft’s failure in the smartphone OS business is that Google copied Microsoft’s business model when it made Android available to any and all hardware manufacturers. That’s exactly how Microsoft sold DOS and then Windows for decades (although very recently they’ve added their own brand of machines).
Did you know Coca-Cola had THREE chances to buy Pepsi between 1922 and 1933?
(It’s number 11).
This helped Google compete against Apple, but Microsoft had lost by 2008.
I think the main innovation was the mobile app store. You could argue that sitting on Windows Marketplace for 5 years before making a mobile version was a key failure.
iPhone Launch Jan 2007
iPhone SDK Mar 2008
iPhone App Store Jul 2008
Android HTC Dream/G1 Sep 2008
Android SDK Sep 2008
Android Market Oct 2008
Pocket PC (with Mobile Phone) 2002
Windows Mobile 2003
Windows Marketplace Oct 2004
Windows Marketplace for Mobile Feb 2009
Windows Mobile 6.5 May 2009
RIM BlackBerry App Storefront Mar 2009
Symbian Jul 2009```
(Most of these dates are announcement dates, but some are launch dates)Here’s another one. The TI-99/4A microcomputer was released in the early 80s. TI looked around and saw that some programmers were getting rich selling apps for PCs. They decided they wanted a piece of the action forced would-be developers to get a secret code to run a program and give TI a share of their sales. They apparently thought that PCs sold programs rather than vice versa. Since they were trying to break in to a market, not many programmers went for it and, without many apps, they sold few computers.
Ron Perelman made a series of bad business decisions that almost destroyed Marvel Comics – and perhaps the entire comic book industry – in the early 90s. He pushed for “event” comics and put out more and more titles at higher and higher prices, expecting the fans to follow along. But they wouldn’t pay that much, and grew tired of a dozen issue #1s being put out each year.
The worst decision was to buy Hero’s World distributors and make them their exclusive distributor. Comics were sold to the comic book shop through distributors, who gave discounts according to the number of comics ordered. The two main distributors were Diamond and Capital City. Hero’s World was tiny, and suddenly had to distribute Marvel – the biggest company in the world. It was done very quickly, so Hero’s World didn’t have time to ramp up, and Marvel pulled distribution from Diamond and Capital City.
Comic book shops couldn’t ignore Hero’s World – Marvel Comics were their bread and butter – so they had to order from them. Hero’s World didn’t have the staff to handle it. Orders were not filled. I heard one story where someone called them and were put on hold. Twenty-four hours later, they were still on hold.
DC couldn’t afford to split their titles between Diamond and Capital City, so had to pick. They chose Diamond. Capital City couldn’t stay in business just selling Image and Dark Horse, so folded. The need to buy from multiple distributors increased the price per comic for comic book shops, so many of them folded.*
Meanwhile, Hero’s World never was able to service the comic book shops and folded. Marvel moved to Diamond because they were the only game in town.**
Marvel overextended and went bankrupt. Perelman did well, though. And there are those who think that his manipulations nearly killed the entire comic book industry.
*Though that probably would have happened anyway. The market was glutted. For a while anyone could succeed in running a shop (the owner of our local one said that at the time, just about anyone could make a go at it). As an aside, I once walked into a brand-new comic book story near my house for the first time, and the guy behind the counter offered to sell the store to me. I declined.
**Diamond was even investigated for antitrust violations, even though it all fell into their laps.